scholarly journals The impact of board size on firm performance: evidence from the UK

2009 ◽  
Vol 15 (4) ◽  
pp. 385-404 ◽  
Author(s):  
Paul M. Guest
Keyword(s):  
Firm Performance ◽  
Board Size ◽  
The Uk ◽  
The Impact

scholarly journals The Impact of Board Composition on Firm Performance with Reference to Selected Indian Companies

2020 ◽  
Vol 8 (6) ◽  
pp. 2818-2824
Keyword(s):  
Firm Performance ◽  
Significant Relationship ◽  
Financial Services ◽  
Stock Exchange ◽  
Independent Directors ◽  
Board Composition ◽  
Women Directors ◽  
Board Size ◽  
Size Number ◽  
The Impact

This study examines effects of board composition on firm performance among 24 selected companies which are listed on the National Stock Exchange. It strives to understand the influence of corporate governance by testing 3 variables of board composition namely – board size, number of independent directors and the number of female directors on a company’s profitability measured through the tool – Tobin’s Q. One-way Anova test is used to establish a relationship between each of the three variables of board composition with firm profits. The study is conducted over a period of 5 years from 2013 to 2018 and concentrates on the following sectors - Auto, Financial Services, FMCG, IT, Media, Metal, Pharma, and Realty. The results revealed a significant relationship between board size and number of independent directors with firm profits which meant a firm with a greater sized board or more independent directors also showed higher profits in comparison. While, no significant relationship was found between the number of women directors on a firms’ board and firm performance.

The impact of VC backing on the corporate governance of Chinese IPOs

2017 ◽  
Vol 29 (3) ◽  
pp. 330-355 ◽  
Author(s):  
Qing (Sophie) Wang ◽  
Hamish D. Anderson ◽  
Jing Chi
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Independent Directors ◽  
Board Independence ◽  
Board Size ◽  
Content Type ◽  
Shareholder Protection ◽  
Political Ties ◽  
The Impact ◽  
Industry Experience

Purpose The purpose of this paper is to investigate how venture capital (VC) backing influences the board size and independence and how VC backing and board structure impact firm performance in China. Design/methodology/approach Using hand-collected data from 924 initial public offering (IPO) prospectuses covering the period from January 2004 to December 2012, the authors investigate the impact of VC backing on board size, board independence and firm market performance through regression analysis. A two-stage approach is also used to address the endogeneity issue. Findings The authors find robust evidence that VC-backed IPOs have more independent boards, after controlling for CEO and firm characteristics, and the potential endogeneity concerns. Furthermore, firms backed by VCs with management political ties (PTs) have more independent directors with industry relevant expertise than other firms. While no significant relationship is found between board independence and firm performance, the authors present some evidence that IPOs which have a larger percentage of independent directors with industry relevant expertise exhibit higher long-term stock returns, and VCs with management PTs also improve IPO long-run stock performance. Research limitations/implications Although VC is new in China and the Chinese capital market has relative poor corporate governance and weak minority shareholder protection, the authors find support in this paper that VC backing is valuable to IPO firms in China not only through providing funding but also by providing political ties and industry experience. However, Chinese regulatory and institutional settings have strong impact on test results and they change rapidly, so the results may not apply to other period in Chinese markets. Originality/value This paper sheds lights on the influences of VC backing on corporate governance and firm performance in a transitional and emerging economy. It discovers the value of VC investors in a transitional economy as of providing political ties and industry experience. The new definition of independent directors suggested by Suchard (2009) is first used by our paper in the Chinese context.

scholarly journals The Impact of Corporate Board Size on Firm Performance: Evidence from Ghana and Nigeria

2017 ◽  
Vol 4 (2) ◽  
pp. 1 ◽  
Author(s):  
LjEbenezer Agyemang Badu ◽  
K.O. Appiah
Keyword(s):  
Firm Performance ◽  
Agency Theory ◽  
Firm Size ◽  
Positive Relationship ◽  
Empirical Support ◽  
Corporate Board ◽  
Board Size ◽  
Listed Firms ◽  
Different Types ◽  
The Impact

This paper examines the impact of corporate board size on firm performance for a sample of 137 listed firms in Ghana and Nigeria. Our findings suggest a statistically significant and positive relationship between board size and firm performance, implying that in Ghana and Nigeria allowing corporate board size to be dependent of firm size tends to improve firm performance. Our findings are consistent across different kinds of models that deal with different types of endogeneities and corporate performance proxies. Our results provide empirical support for agency theory, which suggests that optimal corporate board size effectively advise, monitor and discipline management thereby improving firm performance.

Board structure: an empirical study of firms in Anglo-American governance environments

2014 ◽  
Vol 40 (7) ◽  
pp. 681-699 ◽  
Author(s):  
M.I. Muller-Kahle ◽  
Liu Wang ◽  
Jun Wu
Keyword(s):  
Firm Value ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Board Independence ◽  
Board Structure ◽  
Board Size ◽  
Content Type ◽  
The Usa ◽  
The Uk ◽  
The Impact

Purpose – With boards of directors playing both monitoring and guidance roles, the purpose of this paper is to examine the impact of board structure on firm value in large US and UK firms using the lenses of agency and resource dependence theories. Design/methodology/approach – Using a sample of firms in the USA and the UK from 2000 to 2007, the paper conducts a panel data analysis of the impact of board structure on firm value and examine the nuances of different governance environments. Findings – The paper finds distinct differences in the impact of board independence, board size, and outside director busyness on firm value between UK and US firms. Specifically, the paper finds that board independence, board size, and board busyness all have a significant positive impact on firm value in the UK. However, the paper finds no significant relationship between board independence and firm value among US firms. Both board size and board busyness are found to be positively associated with firm value in the USA. Social implications – The paper finds strong support for resource dependence theory in the UK but limited support for agency theory in the USA. Originality/value – This paper takes a multi-country approach to examining the impact of board structure on firm value.

scholarly journals Dynamic capabilities for firm performance under the information technology governance framework

2020 ◽  
Vol 32 (2) ◽  
pp. 129-157 ◽  
Author(s):  
Sabine Khalil ◽  
Maksim Belitski
Keyword(s):  
Information Technology ◽  
Firm Performance ◽  
Dynamic Capabilities ◽  
It Governance ◽  
Content Type ◽  
Governance Framework ◽  
Technology Governance ◽  
The Uk ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to investigate the role of dynamic capabilities in the Information Technology (IT) Governance view framework and explores the relationship between three domains of IT governance (Strategy, Management and Operations) and firm performance. Design/methodology/approach In this study, the authors used a mixed methods approach and using a survey instrument and its validation with interviews, to collect data from 134 successful European SMEs in the multi-country setting of Belgium, Bulgaria, Denmark, Spain and the UK. Findings The findings show that various IT governance mechanisms function as dynamic capabilities and are directly associated with firm performance. The impact of each mechanism is different. Originality/value This study highlights the relationship between IT governance acumens and organisational performance. It contributes to the field of IT Governance Framework in management, and the results may be generalisable to wider economies and different organisation types.

scholarly journals Influence of Board Size and Independence on Firm Performance: A Study of Indian Companies

2007 ◽  
Vol 32 (3) ◽  
pp. 39-60 ◽  
Author(s):  
Ajay Kumars Garg
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Good Deal ◽  
Independent Directors ◽  
Board Composition ◽  
Board Independence ◽  
Inverse Association ◽  
Board Size ◽  
Minimum Number ◽  
The Impact

Corporate governance issues have attracted a good deal of public interest because of their apparent importance for the economic health of corporations and society in general, especially after the plethora of corporate scams and debacles in recent times. Corporate governance issues flow from the concept of accountability and governance and assume greater significance and magnitude in the case of corporate form of organization where the ownership and management of organizations are distanced. And, it is in this context that the pivotal role played by the board of directors in maintaining an effective organization assumes much importance. A major part of the debate on corporate governance centres around board composition especially board size and independence. Various committees have mandated a minimum number of independent directors and have given guidelines on board composition. However, the relationship of board characteristics such as composition, size, and independence with performance has not yet been established. This paper addresses this question: Does the board size and independence really matter in terms of influencing firm's performance? The findings suggest that: There is an inverse association between board size and firm performance. Different proportions of board independence have dissimilar impact on firm performance. The impact of board independence on firm performance is more when the board independence is between 50 and 60 per cent. Smaller boards are more efficient than the larger ones, the board size limit of six suggested as the ideal. Independent directors have so far failed to perform their monitoring role effectively and improve the performance of the firm. The guidelines on corporate governance should take into account the ‘cross-board’ phenomenon while defining the criteria for eligibility for appointment as an independent director. Lack of training to function as independent directors and ignorance of the procedures, tasks, and responsibilities expected of them could be reasons for the independent directors' non-performance. A bad performance leads to an increase in board size, which in turn, hampers performance. Guidelines are provided for future studies to include different variables to see which board composition is suitable for different companies at different stages of life cycle.

scholarly journals The Nexus Between Corporate Governance and Firm Performance During COVID-19 Pandemic in Sri Lanka

2021 ◽  
Vol 3 (1) ◽  
pp. 81-88
Author(s):  
M. Farwis ◽  
M.M Siyam ◽  
MCA. Nazar ◽  
MACF. Aroosiya
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Sri Lanka ◽  
Audit Committee ◽  
Gender Diversity ◽  
Corporate Management ◽  
Unique Contribution ◽  
Quantitative Methodology ◽  
Board Size ◽  
The Impact

The COVID-19 has redefined the world operation. Specially COVID-19 pandemic shows a higher impact on the business field. Accordingly, this study aims to find the impact of corporate governance on firm performance during the Covid-19 pandemic in Sri Lanka. The quantitative methodology deployed and secondary data was collected from 27 companies listed in Colombo Stock Exchange (CSE) for 209 and 2020. The results depicted that pandemic has affected the Corporate Governance (CG) measures unfavorably. Further, board size and qualification of director’s show a positive association between firm performance meantime, NED proportion, Gender diversity, Board meeting, Audit committee size and Audit committee meeting show a negative association between firm performance. It clearly reveals that COVID-19 severely impact the corporate governance attributes and firm performance. The corporate management, regulators, and investors must consider the board’s board size and qualification to recover the corporate sector in any crisis. This study provides a unique contribution to the literature of COVID-19 and firm performance in emerging economies. 

scholarly journals Board structure, ownership concentration and corporate performance: Italian evidence

2017 ◽  
Vol 15 ◽  
pp. 347-359 ◽  
Author(s):  
Vincenzo Scafarto ◽  
Federica Ricci ◽  
Gaetano Della Corte ◽  
Pasquale De Luca
Keyword(s):  
Firm Performance ◽  
Negative Impact ◽  
Ownership Concentration ◽  
Substitution Effects ◽  
Board Independence ◽  
Governance Mechanisms ◽  
Board Size ◽  
Full Independence ◽  
Board Level ◽  
The Impact

This paper investigates the interplay between board-level governance characteristics, ownership concentration and firm performance in the Italian corporate landscape, which is characterized by high (though varying) degrees of ownership concentration. The empirical setting of this study is the Italian stock market and specifically a sample of non-financial firms included in FTSE MIB and mid-cap index of Milan stock exchange, spanning a five-year time period from 2011 up to 2015. We regressed an accounting proxy for firm performance, namely the return-on-asset (ROA) ratio, on several board-level governance variables and specifically board size, board independence, CEO-chairman duality and audit committee (ACD) full independence. In doing so, we also controlled for the impact of different levels of ownership concentration by partitioning the sample into firms with lower and-higher-than-median values of ownership concentration (OC). The empirical results indicate that board characteristics differently impact performance in firms with lower levels of OC compared to firms with higher OC. Specifically, in lower-OC firms, board independence and AC full independence have a negative impact, whereas CEO duality (either alone or interacted with board independence) has a positive impact on performance. Conversely, higher-OC firms benefit from a large board size and are negatively affected by AC independence, while the remaining variables are not significant. The key insight to be gained from our evidence is that the individual and interaction effects of board-level mechanisms may be contingent on the presence of other governance mechanisms (in this instance, the degree of ownership concentration). As such, this research adds to the existing literature questioning the ‘one-size-fits-all’ approach to corporate boards. In terms of practical implications, our findings support the notion that firms might consider the potential interaction and substitution effects between governance mechanisms and structure boards accordingly.

scholarly journals Corporate Governance Mechanisms and Firms’ Performance: An Empirical Analysis of Firms Listed on the Saudi Stock Exchange

2016 ◽  
Vol 6 (2) ◽  
pp. 101 ◽  
Author(s):  
Hamad Yuosef Alhumoudi
Keyword(s):  
Firm Performance ◽  
Stock Exchange ◽  
Positive Influence ◽  
Board Size ◽  
Cross Sectional ◽  
Ceo Duality ◽  
Ownership Structures ◽  
Board Characteristics ◽  
Corporate Governance Mechanisms ◽  
The Impact

This study examines whether implementation of internal CG mechanisms have affected the performance of non-financial firms listed on the Saudi stock exchange “Tadawul”, since the implementation of Saudi CG code. A cross-sectional regression analysis is employed on a sample of 118 non-financial Saudi firms in 2014, to test the hypotheses set out in the study. Board characteristics assessed include, board size, board composition, board meetings and CEO duality. Ownership structures include managerial and concentrated ownership. The study's empirical findings show board size and CEO duality, are amongst those board characteristics with a positive influence on firm performance. In the case of the second internal mechanisms of CG ownership structures, the findings suggest only managerial ownership positively affects performance. The study findings conclude that CG structures differ in every country, as each has its own social and regulations situation. The study contributes to existing literature about the CG in Saudi Arabia by reviewing the impact of CG practices eight years after the CGC. It enhances understanding among practitioners of CG, and explains how it influences firm performance in Saudi.

scholarly journals How does board structure impact on firm performance in the UK?

2019 ◽  
Vol 15 (2) ◽  
pp. 18-27 ◽  
Author(s):  
Ahmad Alqatan ◽  
Imad Chbib ◽  
Khaled Hussainey
Keyword(s):  
Firm Performance ◽  
Significant Negative Correlation ◽  
Board Structure ◽  
Tobin’S Q ◽  
Return On Assets ◽  
Board Size ◽  
Tobin's Q ◽  
Positive Correlation ◽  
Using Data ◽  
The Uk

The aim of this paper is to examine whether or not the structure of the board of directors and, in particular, board size, independence and remuneration have an impact on firm performance. The sample examined is UK FTSE 100 non-financial companies using data from the period 2012 to 2015. A regression analysis has been used concluding a significant positive correlation between board remuneration and firm performance, namely Return on Assets and Tobin’s Q. The study also concluded a positive correlation between board size and ROA, and between board independence and Tobin’s Q. Additionally, a significant negative correlation between the control variables (i.e. company size and industry) and Return on Assets.

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